Consumers Are Better With Money Than They've Been In 18 Years

In a positive sign that consumers are getting a handle on their
personal finances again, the delinquency rate for bank cards
has fallen to an 18-year low.

In the last
quarter of 2012, bank card delinquencies fell 28 points to 2.47
percent, according to a report issued by the American
Bankers Association. For the first time since 2011,
delinquencies on property improvement loans, home
equity loans and home equity lines of credit
declined.

Auto loans
proved to be the only sore spot, rising slightly from 0.95 to
0.96 percent.

Delinquencies in this case refers to payments that are 30 days
or more past due.

James
Chessen, ABA’s chief economist, chalked up consumers'
behavior to anxiety over economic roadblocks like the federal
sequester and Fiscal Cliff.

“Make no mistake about it, a great deal of uncertainty still
lingers over this economy,” Chessen said in a statement.
“Furloughs from sequestration, falling disposable
income and increased health care and regulatory costs for
businesses could lead to challenges in the year ahead.”

In the
meantime, conservative spending habits don't necessarily mean
bad news for the economic recovery –– it's just the
opposite.

"While
this conservative approach to credit may slow economic growth
in the short-term, it portends stronger, more consistent
growth in the future," Chessen said. "The sharp decline in
delinquencies reinforces the notion that the economic
recovery has become more self-sustaining and is on a path to
increased growth.”